What You as a Restaurateur Can - and Must - Do to Shield Your Business from Financial Liability and Give You Peace of Mind That the Business Will Continue to Operate and Generate Revenue!

Today's litigious society requires careful business planning. Accident victims look for someone else to pay for their injury and any property damage. Even if the suit is eventually dismissed or proved groundless, the high cost of defense can bankrupt even the most secure business. It pays to understand what a general liability insurance policy covers . . . and what it doesn't cover.

Defense (Attorney’s Fee to Defend You)

For most general business liability policies, there is no limit for the amount of defense that the company will provide for a covered cause of loss within the policy limits. If your insurance is inadequate to fully pay the damages asked for by the injured party, the insurance company will suggest that you secure your own legal council for the amount of the loss above the limit of insurance. Example: your limit of insurance is $100,000, but the lawsuit is $500,000. The insurer will only defend the first $100,000 of the loss and if the company pays the claimant $100,000, their defense is ended.

Recommendation: Higher limits of insurance are less costly today than years past. We are recommending you consider at least the higher limits. Higher limits are available through an umbrella policy.

What is Covered?

The company agrees to defend you and pay sums, which you are legally obligated to pay because of bodily injury and property damage. The best available coverage form is the occurrence form. The occurrence form will pay for losses that occur during the policy period, even if the suit is brought many years later. Asbestos, IUD, and breast implants all are recent examples of suits being brought long after the product was first manufactured or sold.

Other coverages include medical payments to injured people. Medical payments are non-suit coverage. For example: a customer slips on your sidewalk and breaks a hip. You provide first aid and call an ambulance. The limit of coverage under medical payments will be available to pay for the medical payments your customer incurs, regardless of fault. Covered expenses beyond the limit per person medical payments protection will require establishing your negligence and be subject to the occurrence and aggregate limits of bodily injury liability insurance.

Personal and advertising injury claims exclude advertising, publishing, broadcasting or telecasting done by or for you. The general liability policy is not appropriate for advertisers or broadcasters or for commercials or ads you do on your own. Personal and advertising injury is subject to a separate sub-limit of insurance.

Personal and advertising injury includes:

• False arrest,
• Detention or imprisonment;
• Malicious prosecution;
• The wrongful entry or eviction or right of private occupancy of a room, dwelling or premises that a person occupies by or on behalf of its owner, landlord or lessor;
• Libel or slander;
• Oral or written publication of material that violates a person's right of privacy;
• Misappropriation of advertising ideas or style of doing business;
• Infringement of copyright, title or slogan.

Personal and Advertising injury is an often overlooked coverage, but a libel or slander suit can be among the most expensive to defend.

Liability Policy Exclusions

Let’s get one thing clear… All policies have exclusions. You hear terms like all risk, special form, comprehensive, full coverage. Those phrases do not mean there are no exclusions. Companies use exclusions because certain exposures to loss may be too great to cover under a standard policy, or simply too great for the company to consider insuring. If you would like to have a particular exclusion removed, ask us and we will see whether your insurance company or another specialty insurer we work with can provide the coverage. Understand, however, that many normally excluded coverages like pollution liability may carry high premiums.

What are the Standard Liability Policy Exclusions?

• Automobile accidents (cover with an auto policy)

• Workers compensation losses (cover with a workers compensation policy)
• Intentional injury (cannot normally be covered)
• Pollution liability (usually available in specialty markets)
• Aircraft or watercraft liability (cover with an aircraft, boat or yacht policy)
• Liquor liability (people whose business it is to sell or manufacture liquor)—many companies offer this coverage as a separate policy
• War (cannot normally be covered)
• Property sold or abandoned (cannot normally be covered)
• Property in your care, custody or control (personal property in your care can be covered by a bailees policy; fire damage liability applies to your landlord's property)
• Products recall (usually only available in the specialty markets)
• Contractual liability for other than covered contracts (specific contracts can be added by endorsements)
• Certain operations of mobile equipment (transportation by an auto or while the mobile equipment is preparing for, practicing for or actually racing)
• Damage to your product or your work (the totally immersible toaster you manufacture electrocutes your customer; damage to the toaster is not covered, but injury to your customer is covered)
• Damage to impaired property or property not physically injured (impaired property includes property damaged by tampering scares i.e., the Tylenol tampering scare)

 What is covered and what is not covered by an insurance contract is challenged every day in court. Needless to say the scope of what your insurance contract will cover also changes. The description above is intended for informational purposes only. If you have any legal questions, please contract a lawyer.

 Read your policy it is a legally binding contract between you and your insurance carrier.

 Be a smart consumer...but don't try to be your "own agent." Protection for you and your business requires constantly vigilance....and a partnership between you and your professional agent. For the latest information on how to save money AND get the best protection for yourself and the people you care most about, here's 3 easy ways to reach us:

Toll-free Phone - 877-994-6787

Toll-free Fax - 888-467-7968

Email - chef@zipdrip.com

© 2004 Stromsoe Insurance Agency, Inc. The reader assumes all responsibilities for his/her own actions in regards to any items discussed in this report. Adherence to all applicable laws and regulations, federal, state and local, governing the use of any product or service described in this report in the US or any other jurisdiction is the sole responsibility of the reader. The publisher and author assume no responsibility or liability whatsoever on the behalf of the reader of these materials. The reader is encouraged to consult directly with his/her insurance

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